SA doesn’t want our dollars -Naspers
Koos Bekker slams policies Competition Commission uses to ‘retard investment’
● Naspers chair Koos Bekker took a swipe at competition authorities on Friday, saying that an old-fashioned approach is hampering investment in SA.
He made the comments to Naspers shareholders as the company prepares to list the bulk of its business on Euronext in Amsterdam — a move management and the board hopes will unlock value trapped in a company that has outgrown the JSE.
Bekker, who founded M-Net in the 1980s and was CEO of Naspers for nearly two decades before becoming chair in 2014, is a wellknown business leader but does not speak in public often.
On Friday he chaired the company’s annual general meeting and a subsequent meeting to approve the listing of Prosus — Naspers’s global internet asset portfolio.
The transaction was approved by a landslide as more than 95% of the ordinary shareholders voted in favour of listing next month.
The company is set to be the largest consumer-facing internet company in Europe.
Naspers’s eye-watering growth story over the past two decades is thanks to some savvy investments in technology — most notably taking an early stake in Chinese internet giant Tencent — and Bekker is largely credited with transforming what had been a newspaper and pay-TV business into one of the world’s 10 largest tech powerhouses.
Naspers’s value has increased to R1.5-trillion from R2bn shortly after the turn of the century. And when Bekker talks about competition, he does not mention local players, but Facebook, Amazon, Google and Alibaba.
Naspers now has a sizeable presence in the world’s largest emerging markets, mainly through electronic classifieds businesses, online payments and food delivery companies. But at home, some of Naspers’s plans have been frustrated by regulators.
Earlier this year, the Competition Commission recommended to the Competition Tribunal that Naspers’s proposed R1.4bn investment in vehicle-trading platform WeBuyCars be prohibited. “The competition people need to somehow lift themselves to a global level, otherwise they actually retard investment,” Bekker told shareholders.
South African transactions are relatively small in the life of Naspers. Though it has invested more than R6bn in local online shopping site Takealot, and created a R1.4bn fund called Naspers Foundry for SA-based tech start-ups, this is modest compared to the $20bn (about R300bn) in capital it shifted over the past two years to rejig the global business.
“When we want to bring our dollars back to invest in SA, we sometimes see limitations to that,” said CEO Bob van Dijk. Bekker told shareholders the approach by SA’s authorities of “increasing competition scrutiny” is not sensible with global giants on the prowl. A Naspers subsidiary last year planned to acquire a 60% stake in WeBuyCars. But in May the Competition Commission said that as Naspers already had other interests in the industry, the deal was “likely to substantially prevent or lessen competition in the relevant markets and result in used-car customers paying higher prices in future than they would otherwise pay in a competitive environment”.
Naspers takes a global view, said Van Dijk, and as such it sees great opportunities to invest in SA. But “significant restrictions” in competition regulation make it tougher to justify allocating time and resources to mergers and acquisitions [M&A] in SA. “Our M&A lawyers have better things to do,” he told Business Times.
And there is no better example of a bigger deal than the Prosus listing. Not only have European financial journalists started taking an interest in Naspers, but Prosus has had an approach from an English Premiership football team for a jersey sponsor. “We said ‘no’,” said Van Dijk.
Prosus — “forwards” in Latin — was tested in 104 languages to gauge whether it might signify something inappropriate. The listing in Amsterdam is scheduled for September 11 and Prosus will also have a secondary listing on the JSE. “Naspers expects to own no less than 73% of Prosus with a free float of up to 27% created through a capitalisation issue of Prosus shares to Naspers shareholders,” the company said in a statement after the transaction had been approved. Naspers will retain its primary listing on the JSE.
The competition people need to somehow lift themselves to a global level